Mississippi Real Estate Broker Exam — All Questions

A Mississippi responsible broker receives an earnest money check on an accepted contract. It must reach the trust account by the close of business of:

• a.the banking day immediately after receipt
• b.two banking days immediately after receipt✓
• c.three business days immediately after receipt
• d.five calendar days immediately after receipt

Section 73-35-21(1)(f) defines "reasonable time" for depositing money belonging to others as "by the close of business of two (2) banking days immediately following the date on which a licensee comes into possession of monies belonging to others or on which a responsible broker takes or receives any cash or checks from procuring the execution of an earnest money contract or option or other contract." SB 2748 (2026 Regular Session), ch. 350, effective July 1, 2026, moved it there from "the next banking day." Watch the trap: MREC Rule 3.4(A) has not caught up and still requires the deposit "prior to the close of business of the next banking day." The statute controls, and the Commission has said so — its own August 2026 regulations preview reads, "Statute trumps the rule. Will be fixed in the Rules on the next pass." Answer the statute, and note that failing to deposit within a reasonable time, or commingling money belonging to others with the licensee's own funds, is a ground for suspension or revocation.

A Mississippi salesperson takes an earnest money check from a buyer on a Friday afternoon. The salesperson must:

• a.deposit it in the firm's operating account
• b.hold it until the seller accepts the offer
• c.pay it over to the responsible broker at once✓
• d.endorse it over to the closing attorney

MREC Rule 3.4(A) makes the responsible broker responsible at all times for earnest money deposits and requires a licensee to pay over to the responsible broker all deposits and earnest money immediately upon receipt. The broker, not the salesperson, is the account holder, and a salesperson may not establish a property-management escrow account independent of the broker. Rule 3.4(C) requires accurate records of all monies received, disbursed or on hand, each item individually identified to a particular transaction, kept in accordance with standard accounting practices and subject to inspection by the Commission at all times. The same rule draws the one narrow exception to the no-commingling principle: monies received in a trust account on behalf of clients or customers are not assets of the broker, but the broker may deposit and keep some personal funds in each escrow or rental account for the express purpose of covering service charges and other bank debits. Rule 3.4(D) adds that if a check the broker took as escrow agent is later dishonoured, the broker must immediately notify all parties to the transaction.

A Mississippi sale collapses and buyer and seller each demand the earnest money. The broker may:

• a.release it to the party the contract favors
• b.hold it in escrow until one party gives way
• c.divide it and pay each party an equal share
• d.turn it over to a court for disposition✓

MREC Rule 3.4(A) provides that in the event of uncertainty as to the proper disposition of earnest money the broker may turn the earnest money over to a court of law for disposition, which MREC describes as an interpleader into chancery court. The same rule requires the broker to return earnest money promptly when the purchaser is rightfully entitled to it, allowing reasonable time for the check to clear, and makes failure to comply a ground for revocation or suspension. Picking a winner is what the broker is least equipped to do — deciding which party the contract favors is a legal judgment, and paying out on it invites a claim from the other side. An even split satisfies neither party's contractual right. Sitting on the money indefinitely leaves the broker holding disputed funds with no way out, which is precisely what the interpleader route exists to prevent. Rule 3.4(B) settles one case in advance: where the broker is the seller's agent and the seller fails or is unable to close, the broker has no right to any part of the earnest money even if a commission has been earned, and the whole deposit goes back to the purchaser.